BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                AB 2292
                                                                Page  1

        CONCURRENCE IN SENATE AMENDMENTS
        AB 2292 (Bonta)
        As Amended  June 11, 2014
        Majority vote
         
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        |ASSEMBLY:  |     |(May 27, 2014)  |SENATE: |36-0 |(August 4,     |
        |           |     |                |        |     |2014)          |
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             (vote not relevant)


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        |COMMITTEE VOTE:  |8-0  |(August 13, 2014)   |RECOMMENDATION: |concur    |
        |(L. Gov.)        |     |                    |                |          |
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        Original Committee Reference:    L. GOV.  

         SUMMARY  :  Allows an infrastructure financing district (IFD) to  
        finance public capital facilities or projects that include  
        broadband.

         The Senate amendments  :  

        1)Delete the provisions that would have authorized an IFD within  
          the Oakland Army Base, the Howard Terminal, or the Coliseum City  
          in the City of Oakland to finance public capital facilities or  
          projects that include freight rail, and the provisions that would  
          have required the governing board of the City of Oakland to  
          establish a commission, as specified, to advise the city on the  
          safety concerns regarding development on the Howard Terminal.

        2)Add new provisions to IFD law to allow any IFD to finance public  
          capital facilities or projects that include broadband.

        3)Define, for purposes of the bill, the term "broadband" to mean a  
          "communications network facilities that enable high-speed  
          internet access."

         EXISTING LAW  :

        1)Authorizes cities and counties to create IFDs and issue bonds to  
          pay for community scale public works:  highways, transit, water  
          systems, sewer projects, flood control, child care facilities,  








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          libraries, parks, and solid waste facilities.

        2)Allows an IFD to divert property tax increment revenues from  
          other local governments, excluding school districts, for up to 30  
          years, in order to pay back bonds issued by the IFD.

        3)Requires that in order to form an IFD a city or county must  
          develop an infrastructure plan, send copies to every landowner,  
          consult with other local governments, and hold a public hearing.

        4)Requires that when forming an IFD, local officials must find that  
          its public facilities are of communitywide significance and  
          provide significant benefits to an area larger than the IFD.

        5)Requires that every local agency who will contribute its property  
          tax increment revenue to the IFD to approve the plan.

        6)Requires a two-thirds voter approval of the formation of the IFD  
          and the issuance of bonds.
        7)Requires majority voter approval for setting the IFD's  
          appropriations limits.

        8)Specifies that public agencies that own land in a proposed IFD  
          may not vote on issues regarding the district.

        9)Authorizes IFDs to issue a variety of debt instruments, including  
          bonds, certificates of participation, leases, and loans.

        10)Requires any IFD that constructs dwelling units to set aside not  
          less than 20% of those units to increase and improve the  
          community's supply of low- and moderate-income housing available  
          at an affordable housing cost to persons and families of low- and  
          moderate-income.

         AS PASSED BY THE ASSEMBLY  , this bill:  

        1)Allowed any IFD within the Oakland Army Base, the Howard  
          Terminal, or the Coliseum City in the City of Oakland to finance  
          public capital facilities or projects that include freight rail,  
          in addition to the projects authorized in existing IFD law.

        2)Required the governing board of the City of Oakland to establish  
          a commission to advise the city on the safety concerns regarding  
          any development authorized by 1) above, on the Howard Terminal,  
          and requires the commission to consist of one member from each of  








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          the stakeholders involved in the development of the Howard  
          Terminal, including, but not limited to, all of the following:

           a)   A representative for the City of Oakland appointed by the  
             governing board of the City of Oakland;

           b)   A representative for the Port of Oakland appointed by the  
             Board of Port Commissioners; and,

           c)   Every owner or lessor of property located within the Howard  
             Terminal or a representative appointed by the owner or lessor.

        3)Found and declared that a special law is necessary and that a  
          general law cannot be made applicable because of the unique  
          circumstances applicable to the City of Oakland and the need for  
          revitalization on the Oakland Army Base, the Howard Terminal, and  
          in the Coliseum City.

        4)Provided that no reimbursement is required because the only costs  
          that may be incurred by a local agency or school district are the  
          result of a program for which legislative authority was requested  
          by that local agency or school district, as specified.
         
        COMMENTS  :   

        1)Purpose of this bill.  This bill allows any IFD to finance public  
          capital facilities or projects that include broadband, and  
          defines "broadband" as communications network facilities that  
          enable high-speed Internet access.  
           
          This bill is sponsored by the City of San Leandro.

        2)Author's statement.  According to the author, "AB 2292 provides  
          cities and counties with a tool to expand broadband projects that  
          would bring high-speed communications, jobs, and new businesses  
          to local communities.  Access to high-speed fiber optic networks,  
          like the one in San Leandro, provides businesses with a  
          significant competitive advantage, helping them to grow and  
          become industry leaders.  Businesses connecting to San Leandro's  
          high-speed fiber loop enjoy Internet speeds of up to 10 gigabytes  
          per second, which is roughly 2,000 times the average speed of an  
          Internet connection in the U.S. [United States].  By adding  
          broadband-related projects to the list of facilities an IFD can  
          finance, AB 2292 will allow San Leandro and other local  
          governments to create and expand broadband networks that will  








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          help keep California at the forefront of the innovation economy."

        3)IFDs.  Cities and counties can create IFDs and issue bonds to pay  
          for community scale public works, including highways, transit,  
          water systems, sewer projects, flood control, child care  
          facilities, libraries, parks, and solid waste facilities.  To  
          repay the bonds, IFDs divert property tax increment revenues from  
          other local governments for a period of 30 years.  IFDs, however,  
          are prohibited from diverting property tax increment revenues  
          from schools.

        4)Public facilities of communitywide significance.  State law says  
          that the types of public facilities of communitywide significance  
          that an IFD may finance are not limited to the types of projects  
          that are listed in statute.  As a result, a city-wide fiber optic  
          network may already qualify for IFD financing, despite not being  
          specifically mentioned in the state laws governing IFDs.  This  
          bill may only clarify what is already allowable under current  
          law.

        5)Arguments in support.  Supporters argue that changing state law  
          to add broadband-related projects to the list of approved IFD  
          uses will allow local governments throughout the state to be able  
          to create and expand broadband networks enabling California to  
          remain at the forefront of today's innovation economy.

        6)Arguments in opposition.  None on file.

         
        Analysis Prepared by  :    Debbie Michel / L. GOV. / (916) 319-3958 


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